Saturday, August 18, 2012

Quotation of the Day: Should the Government Try to Reduce Income AND Life-Expectancy Inequality?

“When I talk to people, I find that they generally agree with, and rarely strongly oppose, forcible government transfers of income from the rich to the poor to reduce income inequality. But when I suggest that the government transfer medical expenditures from women to men to reduce life-expectancy inequality,
I get a very different reaction. Often, the listener will simply give
me a strange look and quickly depart. Those who do respond,
however, typically say that I couldn’t possibly be serious because my
idea is outrageously silly. I agree. It is silly. But I am completely
serious in suggesting it.”

“When we seriously consider an attempt to use government power to
reduce the gender inequality in life expectancy, the problems that we
have always faced when government uses its power to reduce income
inequality suddenly become crystal clear. Government transfers to reduce
the gender gap in life expectancy would do little more than reduce
improvements in both women’s and men’s life expectancies. For similar
reasons, government transfers have done little more than reduce the
income growth of both the rich and the poor. So government attempts to
reduce life-expectancy inequality by transferring medical expenditures
would be silly, but no sillier than its attempts to reduce income
inequality by transferring money.”

This seems to be an incorrect analogy. The only reason this idea appears outrageous to most people, is because of transferring medical support from women to men. And I think the reasons have to do not with the idea of transfer per se, but with out psychological biases:

http://en.wikipedia.org/wiki/Women_are_wonderful

I believe if men's life-expectancy was 5-6 years higher then women's, nobody would be offended or outraged by the idea of transferring medical resources from men to women in order to reduce the life-expectancy gap. In fact, I think this idea would be taken rather seriously and implemented.

I'm not stating whether it would be right or wrong. I'm just pointing out to the obvious flaw in this analogy.

I think we can all agree the redistribution of wealth has gone far beyond taking care of the sick, old and disabled. Our tax system is so convoluted at this point Congress doesn't even understand it. The only part politicians grasp is the ability it affords them to pander to the wealthy or poor. Spending through the tax code distorts or masks the true picture of taxes, revenue, welfare spending and poverty.

Do we have 40 million without healthcare or without healthcare insurance? Rhetorical question of course. Then we have the question, what is healthcare and who should pay for what? Should a person receive 100% free healthcare at taxpayer expense or be responsible for a portion of the cost? What should be covered? Obamacare went way overboard by covering 100% of all healthcare costs of the poor. There is no disincentive for over-use and of course no incentive for responsibility of personal wellness. The discussion to solve this problem would greatly benefit by removing emotion from the equation and sticking to facts and figures.

Politicians have discovered that it is much easier to buy women's votes than men's votes.

Obama's 'Life of Julia' campaign clinched the election for him, no matter how much you want to rebut it. Women want socialism, plain and simple (this includes women who vote Republican. Republican women don't want their husband's taxes going to other women, but they sure as hell want laws that make him a total wage slave to her, with her having no such legally-binding reciprocity towards him).

Start with the premise that one life is worth as much as another, gender, race, etc. make no difference.

Age of course does make a difference. You might not spend as much to save an 80 year old life as a five year old life. So modify the premise to state that the value of one year of life is pretty much the same for everyone.

Why, then, would the government overspend to save male life-years if it could save female life-years for less money.

The goal ought to be to buy the maximum life expectancy and minimum morbidity for the dollars spent. Regardless of the program. If it turns out that the least expensive way to prolong life and health is to ban clothespins,then that is what should be done, up to the point at which banishing clothespins reaches diminishing returns.

At that point you shift to the next best priority which might be promoting NASCAR.

If you have enough data to prove that making rich people richer is actually best for everyone in terms of increasing life expectancy and reducing morbidity, then that should be a priority.

But all of this assumes that the governmemt has an interest in and a valid requirement to "promote the general welfare".

"I'm not stating whether it would be right or wrong. I'm just pointing out to the obvious flaw in this analogy."

I agree with Artem: it is a ridiculous analogy.

The government should expend its resources in the best way possible. Its goal should be to charge the tax rate that maximizes its own income over time: too much and you stifle growth, too little and you cannot invest enough to provide the things that help promote growth.

And once it has those taxes it should spend them in a way that optimizes opportunity for everyone. One can argue whether a 1% opportunty to make a billion is better than a 10% opportunity to make ten million is better, but assuming the tax rates are similar in those brackets,the government should be indifferent.

What those that propose really high taxes for the ultra rich do not seem to understand is that if the ridh are taxed at high rates,then it behooves th government even more to do things to help them get that way.

This is simply a case of ignorance of both the role of government and the rules of economic priorities.

I am surprised anyone with a PhD. would suggest such crap.

You expect that indivisuals will pursue what is on their best economic interests, given the choices at hand.

You expect the same out of business: Casterpillar is going to do the best it can in heavy machinery, ignoring biotech. It is not a real choice for Cartpillar any moer than harvrd is a real choice ofr most slum dwellers. Sure, ther is a small oportunity.

Why wouldn't yuo expect the same out of government? It is an organization like any other,and its best interest is best served by broadening its base: investing in the highest of the available most probable returns.

(For myself,I find it hard to believe, for example, that the billons we invested in Afghanistan have a high probability of of good economic return, but I am waiting for the data that exposes the objective truth. Surely there is SOMETHING we could have spent that money on with a better return to Americans.)

I over-extended. We don't have 40 Million w/o healthcare. Those 40 Million have "emergency care."

==================================

Right. So the question is how much can we save one mergency care with adequate health care?

At one time I had no health insurance. I was healping a neighbor kid learn to do a back flip, "spotting" her.

She fell short on rotation and I helped her around, as I had done many times before.

I had what I though was a pulled muscle. I had some pain which I ignored. Turned out to be a separated tendon, and as a result I lost the use of half of my left bicep. It is an easy repair if you catch it in time.

If I had had insurance at the time, would I have ignored the pain? Or would I have goe easy treatment for what has since turned out to be a considerable aggravation?

This is not a life threatening example, but it goes to show what happens when people do not have insurance: they make bad decisions.

One bad decision leads to another. If you had insurance with a $250 deductible for emergency room visits and $35 copay for doctor visits would you still go without medical care for that injury?

=================================

Whose bad decision are you talking about?

At the time, I had no insurance, and no insurance was availble to me. None, not at any price or any deductible limit.

If the policy you describe was available to me, I would have bought it. I could not find such a policy. I hired a broker to find me one and he said no such luck. And I can tell you no one was beating down my door to sell me one.

$100 dollars says you cannot find a comapny that would sell me that plicy today, Even under obamacare, for a premium that is less than 80% of the potential pay out.

I actually had an insurance comapny offer me a policy with some maximum payout clause, and the premium was more than the payout!

Because I had SOME OTHER pre-existing condition, I cuold not buy insurance for ANY condition.

It would be as if because you had an unrepaired roof leak ( a justifiable reason to deny water damage claim) that your insurance company denied you coverage for a lightning strike.

Let me tell you this, today I am healthy. I work a regular job, and do vigourous work on the farm every weekend and more. I am not overweight, do not have High blood pressure, diabetes, etc.

But, without my job in a large comapny that provides health insurance, I owuld have none, because none would be available.

So far as I know. As soon as someome proves otherwise, AI will buy the insurance, quit my job and start my own business.

Like I say, no one is knockiing on my door offering to sell me health isnurance. On the other hand, I get offers from dozens of companies who what to help me invest my money. Every day.

Since you offered a real life example I thought we could discuss it. My point was the decision (bad if you will) to self diagnose and not even see an MD for $85 or less was your decision to make. Turning down surgery, upon correct diagnosis, as an option due to financial issues is a different matter. Don't take it personal, it certainly was not an attack.

BTW, I am self-emoloyed and buy my own insurance. Surprisingly, identical coverage was slightly more than half the cost of the employer plan I had prior to starting my business.

My point was the decision (bad if you will) to self diagnose and not even see an MD for $85 or less was your decision to make.

==============================Point taken.

I have had pulled muscles before. this was a little more painful, but I failed to mad the correct diagnosis.

It simply never occurred to me that there could be permanent and easily corrected damage.

Even had I known, it wuld not have been the $86 dollars to deter me, It would have been the $25k for minor surgery. (actual cost for knee surgury I had later).

In fact, at the time, I had been disabled for quite some time, and even $85 dollars was a stretch.

The fact that I felt well enough (at the moment) to engage in a little horseplay just points out how subtle the realities are.

My point would be that IF i KNEW I had no worries, I would have sought treatment (maybe, Im a pretty tough guy).

This is a minor case, but consider the situation for someone who is a) worse off than I was, b) less educated, and c) facing a far worse ultimate outcome, that they know nothing about.

If the pro obamacare faction is correct, that is where the big savings will come.

Now, consider the situation in which obamacare winds up fixing a bunch of people who are losers in any case. Is it then a waste of momey?

I was extremey lucky. I got a job in a major corporation and was able to get health insurance again. But if I choose to leave the company, or get laid of, I am probably out of luck. Again.

I am at odds on this with a co worker. but he is ex military and has his insurance thorough tri-care. he does not see the irony.

All I can say is this: I paid health insurance premums (with my employers) for over twenty years, and with only monor claims. The first time I needed coaverage,I was too sick to work, and so I did not have it.

You might think you have coverage, but if it is through your employer, you should think again.

"Why wouldn't yuo expect the same out of government? It is an organization like any other,and its best interest is best served by broadening its base: investing in the highest of the available most probable returns."-Hydra

"Why wouldn't yuo expect the same out of government? It is an organization like any other,and its best interest is best served by broadening its base: investing in the highest of the available most probable returns."-Hydra

"What those that propose really high taxes for the ultra rich do not seem to understand is that if the ridh are taxed at high rates,then it behooves th government even more to do things to help them get that way."

I do not see a similarity between the two - this is a false equivalence. That's like saying ... if you ask someone whether or not they like Ketchup on their fries ... people say sure. If you ask them if they like ketchup on their ice cream - they look at you like you're deranged.

So - does that mean we should stop eating ketchup?

People agree that it is perfectly fine to transfer wealth (via higher taxes) in order to balance income inequality because history has shown that if you do not ... many people die and suffer. Whereas if you ask someone if they would give more money to balance out life expectancy ... they would obviously find that ridiculous. The obvious reason for that is simple. If you take away money from someone with a billion dollars and now they have $700 million ... they are not in any worse a position than they were with $1 billion. However - if you take away medical expenditures from the female as explained "to balance out life expectancy" then you are not only giving years to a male ... you're taking away years from a woman.

A person with $700 million lives just as long as a person with $1 billion.

But I guess its ok to see 6 year olds homeless on the streets because we don't want billionaires to pay a little more than they did last year and still less than they did under Reagan. Great priorities.

"People agree that it is perfectly fine to transfer wealth (via higher taxes) in order to balance income inequality..."...

Well classwarfare people are always ready to transfer someone else's wealth instead of their own...

Work for that wealth?!?! Oh no! That's apparently out of the question...

"because history has shown that if you do not ... many people die and suffer"...

Yeah, so what?

"However - if you take away medical expenditures from the female as explained "to balance out life expectancy" then you are not only giving years to a male ... you're taking away years from a woman"...

What are you saying here classwarfare? That women can't get off their butts and make their own billion dollars, it has to stolen from someone else instead?

"A person with $700 million lives just as long as a person with $1 billion"...

And YOU know this how?

"But I guess its ok to see 6 year olds homeless on the streets because we don't want billionaires to pay a little more than they did last year and still less than they did under Reagan"...

Its O.K. by me but then again I'm a believer in personal responsibility so I know it won't be my six year old homeless in the streets...

So classwarfare, how come you and your progressive ilk don't divest yourselves of YOUR personal wealth in order to solve what YOU ALL perceive as a problem instead of standing around whining that those who have made the money aren't sharing the weatlh?

"People agree that it is perfectly fine to transfer wealth (via higher taxes) in order to balance income inequality..."

No - "people" do not agree at all. Some people agree that it's OK to take money from those who - in their judgement - have more than they deserve or need, and give it to those who - in their judgement - need and deserve it more.

Of course they themselves never have more than they need or deserve, so it's always someone else who should pay more. Perhaps those slimy billionaires.

"...because history has shown that if you do not ... many people die and suffer."

If you had more knowledge of, and a better understanding of history, you might realize how ignorant that statement really is.

"Whereas if you ask someone if they would give more money to balance out life expectancy ... they would obviously find that ridiculous."

And rightfully so, just as they would find income redistribution ridiculous if they understood the unintended consequences and if they weren't blinded by envy.

"The obvious reason for that is simple. If you take away money from someone with a billion dollars and now they have $700 million..."

But it is their money and you have no right to steal it from them even if you disguise that theft by asking someone else to do it for you and calling it taxes.

"they are not in any worse a position than they were with $1 billion. However"

But you can't make that judgement. It's not up to you to decide what others need or deserve.

"- if you take away medical expenditures from the female as explained "to balance out life expectancy" then you are not only giving years to a male ... you're taking away years from a woman."

I suspect the whole problem you are having with this analogy is that in your judgement women are not unfairly living longer due to getting more than their fair share of medical care, therefore no redistribution should take place, but income and wealth are different matters. Someone with a large income or great wealth can only have come by it unfairly in your view, so it should be taken from them.

"A person with $700 million lives just as long as a person with $1 billion."

That's not the issue.

"But I guess its ok to see 6 year olds homeless on the streets"

Wait while I wipe away the tears, then I can continue.

Actually that tired hyperbole doesn't work well here. We don't see 6 year olds homeless on the street in the US because we care about them and are rich enough to prevent that condition through our generosity, and would do so without stealing money from those we think have more than they deserve.

If you mean 6 year olds in poor 3rd world countries, then I can only assume that you are redistributing most of YOUR relatively enormous income to those poor children.

"...because we don't want billionaires to pay a little more than they did last year and still less than they did under Reagan. Great priorities."

Who is "we"? You can only speak for yourself. It isn't for "we" to determine what someone else does with their own money, unless "we" condone theft.

Besides the moral case, you are ignoring the fact that wealthy people have a great deal of control over how they earn their income, so just raising some tax rate doesn't guarantee higher tax revenue. And, at some point they decide that they are bleeding too much and go elsewhere with their wealth and their ability to earn large incomes, and take with them the obvious benefits others derive from that ability - one of which is jobs.

The suggestion made by the article would only validate government's right to steal. The author is portraying himself as a statist, and statists' actions are the root cause for most societal problems. A solution could be to reduce the number of statists (temporary) or eliminate government (permanent). I lean toward the latter.

Look at 2009 tax receipts form the IRS data. If we were charged a flat tax of 11.06% for all taxpayers regardless of income, using the same deductions as in 2009, then the Federal Government would take in the same receipts that it did under our current tax system.

If our flat tax was 10%, there were no deductions, and all income was counted as income (including capital gains, inheritance and corporate taxes), it looks like the Feds would take in more taxes than they do currently.

If this was done by employers with payroll deductions, most taxpayers would not have to file a return. Only those who needed to point out doulble taxation or losses would need to file.

The government has done its job. Its turned us all against each other so that we dont even know how badly they do their job. So lets just keep paying more taxes and more fees so that we can be free. All of you are comparing apples to oranges while Congressmen and Senators retire rich at our expense. Laughing all the way to the bank.

Well. You don't have a problem with Wal-Mart charging the prices that maximize profit. Why should government any different?

Prices at Wal-Mart het lower over time but it makes more money..

The claim of conservatives is not that government sound have less money, but that the way government gets more money is to lower taxes.

Of course when government had more money, the demand will be for another round of tax cuts .

Government cannot exist I'm a steady state economy of inflation plus population growth. More people will mean more government is required. No business could succeed under those terms, why would you think government could?

No, like giving them even more special breaks that are available only to them.

Taxes have never prevented someone from getting rich.

The single best predictor of how much someone will make is how much his parents made. Anyone can see that when your economic choices start out with multiplying by zero, your other choices are severely limited. With sufficient intellectual, social, and physical abilit one might break out. One might even wildly succeed.

That does not mean that no better system than the current one is possible or that we should not seek it.

Most importantly, try to get all your commenting done before you start hitting the sauce. You are having enough trouble with that android device you are unable to master, so you don't need the additional problem of thinking that is more muddled than usual.

Then, you should be aware that every device and every browser doesn't display these comments in a tree view, so that when you just post a reply to something without quoting the original for context, your comments are totally without meaning, and have the coherence of the utterances of an Asperger sufferer.

"Government cannot exist I'm a steady state economy of inflation plus population growth. More people will mean more government is required."

What about the term "plus population growth" was unclear? If population growth is 2% this year, government gets up to 2% more people, plus an inflation adjustment to its budget to cover salary raises and rising costs of the goods and services it procures.